There are two ways do this:
- File an amended return: Go back to the years you didn’t deduct depreciation on your rental assets and amend the returns to reflect the missed depreciation. Note: You can only go back three years to claim a possible refund for missed depreciation.
- Adopting a change in accounting method: This option allows you to go back as far as you want. Make the adjustment on your current year tax return to expense the missing depreciation. Not claiming depreciation in two or more years indicates that you've chosen an accounting method without depreciation. In this case, you must now elect to change your accounting method to include depreciation.